Basic Marketing
A Global-Managerial Approach
William D. Perreault, Jr.
E. Jerome McCarthy
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Chapter 1:
Marketing’s Role in the
Global Economy
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Chapter 1 Objectives
When you finish this chapter, you should
1. Know what marketing is and
why you should learn about it.
2. Understand the difference
between micro-marketing and
macro-marketing.
3. Know why and how macromarketing systems develop.
4. Understand why marketing is
crucial to economic
development and our
global economy.
1-2
5. Know why marketing
specialists—including
middlemen and facilitators—
develop.
6. Know the marketing
functions and who performs
them.
7. Understand the important
new terms.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Marketing Defined
1-3
Micro-marketing
Macro-marketing
The performance of
activities that seek to
accomplish an
organization’s objectives
by anticipating customer
needs and directing the
flow of need-satisfying
goods and services.
A social process that
directs an economy’s flow
of goods and services to
effectively match supply
and demand and to meet
society’s objectives.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Implications of the Definition of MicroMarketing
• Applies to profit and nonprofit
organizations.
• NOT just persuading customers to buy.
• Begins with customer needs and focuses on
customer satisfaction.
• Marketing activities --but it is a philosophy
that guides the whole business.
• Seeks to builds a relationship with the
customer.
1-4
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Marketing Is Important!
• Marketing impacts all of us in our lives as
consumers
• Gives us choices
• Stimulates innovation and economic growth
• There are many good job opportunities in
marketing
• Regardless of what career path you take, no
firm (or non-profit organization) survives
for long if it can’t satisfy some group of
customers.
1-5
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Utility and Marketing
From Production
Time
Form
Utility
Value that comes
from satisfying
human needs
Place
Task
Possession
Exhibit 1-1
1-6
From Marketing
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Exchange and Marketing
Pots
Hats
Baskets
Hoes
In very basic economic
systems, each seller
must meet directly with
each buyer in order to
exchange something of
value. As needs
increase, the number of
exchanges can soon
become unmanageable
for one person.
Knives
Ten exchanges required
without central market
Exhibit 1-2A
1-7
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Exchange and Marketing
In a centralized market,
a buyer can go to one
location to find many
different products from
many different sellers.
By reducing the time both
buyers and sellers must
spend to complete an
exchange, prices can be
lowered.
Pots
Central
market
middleman
Hats
Hoes
Baskets
Knives
Five exchanges required
with central market
Exhibit 1-2B
1-8
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Exchange and Marketing
Pots
Pots
Hats
Baskets
Hoes
Knives
Ten exchanges required
without central market
Central
market
middleman
Hats
Hoes
Baskets
Knives
Five exchanges required
with central market
Exhibit 1-2
1-9
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Marketing in Economic Development
1-10
Stage 1
Self-supporting
agriculture
Stage 2
Preindustrial or
commercial
Stage 3
Primary manufacturing
Stage 4
Nondurable
consumer products
Stage 5
Capital equipment and
durable consumer products
Stage 6
Exporting
manufactured products
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Marketing Facilitates Production
and Consumption
Production Sector
Specialization and division of labor = heterogeneous supply capabilities
Spatial Separation
Discrepancies of Quantity
Marketing
needed
to overcome
discrepancies
and
separations
Separation in Time
Separation of Information
Separation in Values
Discrepancies of Assortment
Separation of Ownership
Consumption Sector
Heterogeneous demand for form, task, time, place, and possession utility
Exhibit 1-3
1-11
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Model of Market-Directed
Macro-Marketing System
Many Individual Producers
Middlemen
intermediaries
Facilitators
Perform universal marketing functions
Monitoring by government(s)
and public interest groups
To overcome discrepancies and
separations
To create utility and direct flow of
need-satisfying goods and services
Exhibit 1-4
1-12
Many Individual Consumers
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Key Terms
Production
Customer Satisfaction
Utility
Form
Task
Possession
Time
Place
Micro-Marketing
Macro-Marketing
Economic System
Planned Economy
Market-Directed
Economy
1-13
Micro-Macro
Dilemma
Pure Subsistence
Economy
Market
Central Markets
Middleman
Intermediary
Tariffs
Quotas
Countertrade
WTO
GATT
Economies of
Scale
Universal Functions
of Marketing
Buying
Selling
Transporting
Storing
Standardization
and Grading
Financing
Risk-Taking
Market Information
Facilitators
Innovation
Marketing Ethics
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill